People Leadership Failures, Performance vs. Recruiting vs. HR & Organizational Design Regional Differences - E276

· Singapore,Founder,VC and Angels,Start-up


"I often advise people that they are essentially operating two machines when running a business. The first machine is the business itself, which includes marketing, personnel expenses, and revenue and profits. The second machine is the people who operate the first machine. It's important to think carefully about both machines and ensure that the right people are in the right roles. While many tend to focus solely on the business machine, it's critical to view the two machines as an integrated system and think about how to evolve the team to ensure long-term success." - Shiyan Koh

"This is Southeast Asia's first real economic downturn, and there are no heroic stories of companies raising significant funds. It’s acceptable that companies are winding down and others are making difficult decisions, however, there is a risk that past bad behavior may come to light for other companies during this time. The press and public are currently sifting through this process. This may lead to some well-justified criticism and some that are less justified." - Jeremy Au

"I see three distinct periods in a startup's journey. The first is a period of relative calm when things are going well. The second is when companies face challenges and have to pivot to survive. The third is when companies experience explosive growth, but struggle to manage it effectively. These moments can often be the seeds of future destruction or errors that may come to light later. Startups go through a cycle of ups and downs,and it's a sequence of that.” - Jeremy Au


In a recent discussion between Jeremy Au and Shiyan Koh, they talked about how to build high-performing teams and organizations. They discussed the importance of people leadership, founder behaviour, and organizational design. Regarding people leadership, they highlighted the importance of setting clear expectations, communicating effectively, and creating a culture of feedback. Leaders must also be willing to empower their team members and trust them to make decisions. They should also be willing to admit mistakes and take corrective action when necessary.

Regarding founder behaviour, they emphasized the importance of self-awareness and the ability to let go of control. Founders should also be willing to seek help and support when needed and be open to learning from others. Regarding organizational design, they talked about the importance of creating a structure that supports the company's goals and values. This includes setting clear roles and responsibilities, creating processes and systems, and fostering a culture of collaboration. In conclusion, building a successful organization requires effective people leadership, founder behaviour, and organizational design. By focusing on these areas, leaders can create a high-performing team and a culture of success.


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Jeremy Au: (01:24)

Good morning, Shiyan.


Shiyan Koh: (01:27)

Good morning. Up and at them.


Jeremy Au: (01:29)

Yeah. So here you are drinking a big cup of coffee that we got to have to start the day. I think one thing that we started to see recently was just chatting a little bit about is like all these stories about people's leadership going wrong, right? I think in the news, in the press, we're hearing stories about heads of product running away with cash. We hear stories about low morale. We talk about people being laid off. We hear stories about information being leaked. So a lot of it has to do with the concept of people leadership, organizational design, personal growth of the founders, and the company growth and why it's not seeming to work out the same way. So, I want to take that topic and let's run with it.


Shiyan Koh: (02:12)

Sure. I mean, I think let's start with a few baseline or I'll start with some baseline beliefs, which is that every startup is a shit show. Okay. Just everyone is a flavor of a shit show. So you kind of have to be at the shit show you are happy to be at, but there is no perfect situation. It is the nature of startups that you are growing quickly. A lot of things are getting built as the plane is flying and so things will be messy, and then I think there's sort of like a mess you can recover from and then there's a mess that will speed your demise, right?


Jeremy Au: (02:51)

Different kinds of mess, and so I got to ask you before we go into our beliefs, that will be perfect coming from a textbook about how to do things better, what are some examples of messes that you've seen? Those that were irresolvable and those that were less resolvable. I'll throw one in real quick. Co-founder conflict, right? When mommy and daddy aren’t so happy. It can be very disruptive to the whole organization because they go into camps, they fight each other, and then, often there's co-founder conflict or one co-founder leaves, and then there's turnover. So there's a common mess, and it could be recoverable in the right situation. It could not be recoverable in many situations. So that's one. How about you?


Shiyan Koh: (03:33)

Yeah, so I think that's probably the number one most common. I think another one is similar but different, which is, you have different people believing different things about how your roadmap should be prioritized. There's legacy products versus new products. Double down in the core market versus launching new markets. So it's like a variant of these things because they're all fights over capital allocation. How do we spend our money? How do we allocate our people's time, and if they feel like they can't get a reason from on high and people kind of try to make their own decisions, own resource allocations, decisions at their level, then you get a lot of half people running in one direction and half people running in the other direction, and no one's really like running forward. So I think that's another one.

I think risk and compliance, where, let's say you are doing something that is regulated, there's a compliance function and or initially, there's no compliance function and then people do whatever, and then as the business grows, you're like, oh, maybe we should have a compliance function and then people are like, wait, how come compliance only says no all the time? How do I work around them? I still need to hit targets and ship and things like that and so I think there can be a lot of messes when like people's KPIs are not aligned properly and they're working at odds from each other and that's not the company outcome that you want.


Everyone has their role. Risk should say no, periodically. That's their job. But the product should also not try to go around them. There's like a bunch of stuff around how you do that. I think in product organizations there's like, how much are you working on a new product versus how much you're fixing bugs and taking care of technical debt and how are those decisions made? Who's making those calls? So I mean, well, there's a lot of fodder here, which direction do you want to take it, Jeremy?


Jeremy Au: (05:35)

The story is like the Anna Karenina principle, which is that every happy family is the same and every unhappy family is unhappy in their very special and unique way. It means that, for things to go right, companies are all of it. They're highly strategic, they're thoughtful with capital allocation. They do well with their, HR and their organizational design, and when it comes to things falling apart, it's often like both a symptom but also a cause of those things. They kind of feed each other and then things go sideways, so people always emerge as a critical, comorbidity factor for startup failure. When I hear those stories, I'm just like, and I think they're names I think of. I mean, I think a good example would be Zenefits. It had the issue right around agents that they were skipping and not being compliant with local state regulations in terms of getting their broker's license. That was one. I think there's also a period in the US, there are a lot of articles coming out. I think it was about five years ago, about employee behaviors, like partying too hard. They're not drug usage, I mean, articles have headlines, and actually one of my startup role models that I respected left or resigned. I don't know what a story is.

Because of one of these newspaper headline features, and I thought it was quite sad. I don't know what the reality of that is, but I think I remember that in that article that I read, it was a function of low-level employees, kind of like having certain behaviours and then management not seeming to have cared or not to have stepped in early enough to intervene. So he wasn't participating, but there was that people aspect of it of the headline that, so I don't know.


Shiyan Koh: (07:25)

I think let's distinguish between bad behaviour and what you're responsible for and standard startup churn. So, I think there are like two things. There's, look, anytime you run a layoff, people are going to be unhappy. There's no way that you run a layoff and everyone's like, oh, this is great. No one's going to say that, right? But that doesn't mean that nefarious things were happening. Just because you like it, it just sort of means like, hey, the business hired too fast or kind of got out over its skis and it needs to cut back. Rationalize, but I think that a lot of people will take that badly. Some people do take to the press and they use it as an opportunity to kind of like air dirty laundry and write on Glassdoor or whatever it is to sort of criticize founders. Whether that's warranted or not is TBD, but I think as I would suspect in the vast majority of layoffs, it's like standard business stuff and nothing nefarious is happening, I do think that you do open yourself up to more criticism if you have been sloppy in the past, because it just means there's probably more people who want to take their pound of flesh, give you a hard time, whatever it might be and so I think in the process of growing quickly, how are you treating people? What's the tone that you're setting in your business for how you operate others? Whether it's amongst employees or with customers and partners and it's like a cliche. They always talk about the Wall Street Journal test. If what was happening was on the front page of the Wall Street Journal and your mom read it, how would you feel?


Jeremy Au: (09:05)

Amazing. Clear, and transparent.


Shiyan Koh: (09:10)

Yeah, that's what you want, but if you're like, I kind of don't want my mom to read that, then it's a clue that maybe there's something you need to go fix and so I think it's a pretty useful kind of bright line to think about. But I think maybe, and then I think there's a second thing, which is on org design, sometimes you are making decisions that are going to have downstream impacts that you don't even realize whether it is how you define someone's job scope or didn't define it as the case may be and what reporting relationships mean for communication channels and like what gets prioritized versus what doesn't. All those things can have downstream impacts and I think often, when people are growing quickly, they don't think as hard about that because you're there's so much work to do.

We've just got to get people hired. We need to chase these opportunities and I think sometimes when in downturns, it's often an opportunity to reevaluate some of those decisions and think about hey, am I organized the way that I want to be, to set my company up for success over the next 18 months? So yeah, I don't know. I think we can talk about bad behavior and then we can talk about just standard startup high growth mistake making, which, you know, one's more nefarious than the other.


Jeremy Au: (10:31)

Yeah, I'm just riffing off you. Two things came to mind. First of all is like the headlines, and I think the truth of the matter is that Southeast Asia is having more headlines. So I think in Silicon Valley, it kind of happened almost five years ago. It feels like there was a big wave of those headlines where what they always say, in journalism, you're either the hero, the villain, or an idiot, that's only those three roles you can have.


Shiyan Koh: (10:56)

How about the victim?


Jeremy Au: (10:58)

Okay, then. Okay, fine. We'll make our version of the framework the victim as well. That's a new one as well. The body and the floor. But I think that wave, I think of founders as heroes towards villains or idiots. From the press perspective, I think there was a wave that happened about five years ago and I think there was a bit of a sharpening of the professional behaviour slash awareness about what could happen in Silicon Valley. This wave, this is the first real downturn as well, that Southeast Asia has seen. And so, I think headlines, obviously there's no hero story cause they're not raising like crazy, but now you have companies that are winding down, companies that unfortunately going through some hard decisions, which is, in the realm of acceptable behaviour, but also there's the window of time when these bad behaviours, if there were in the past, can come out for other companies. And so I think the press and the public are kind of going through this sifting process and some of it would be well justified and some of it would be less well justified.

I think in retrospect in 10 years, but now there's this process. And so you can say hunting season is on and now I think for a lot of founders who were previously in the press and only saw them as, that they're suddenly reacting and saying like, oh no, the press can also have that information asymmetry, removing, that's why we are saying it, but also kind of like shining a bright light on those previous decisions, and so I think this is going to be a big learning point for our founders because if your Instagram is always of you jet setting all the time, and they're saying every week to a new location When times are good, that's great behavior.

It's not great behavior. It's acceptable behavioor, nd perhaps it's personal behaviour as well, which is okay if things are going well, maybe it's all above board, but it can look really bad when suddenly, you're laying people off and then you're still travelling, for example. Then you're still taking those photos. Those are all, it's bad for employee morale as well, but I think there's this aspect, I think that there's a bright light that's not happening. These headlines, all the headlines are coming out now. Yeah.


Shiyan Koh: (13:02)

Yeah. Yeah. Well, I mean, I think people are more disgruntled. People want to have their stories out there.


Jeremy Au: (13:08)

It's understandable. If you're unhappy, you want people to hear you and you want people to be in your corner.


Shiyan Koh: (13:14)

Yeah, I think that's fair. I mean, I think, in the boom times there's a lot less scrutiny, right? And so as things get harder and people start shutting down or laying off, then a lot more questions get asked and then, and I think that's appropriate.


Jeremy Au: (13:31)

It always reminds me of this article I read. It was like, Theranos was a big screw-up fraud. Elizabeth Holmes poisoned the well for so many biotech female founders in terms of personal reputation and I would walk around and say, oh, there's a biotech founder I invested in, she's a woman and people are like, oh haha, Elizabeth Holmes and I'm like, yo, that's kind of rude.


Shiyan Koh: (13:50)

Yeah. Also because there's actually on an absolute number of basis, way more men who are frauds. But we say, all men are frauds, do we now?


Jeremy Au: (13:59)

Yeah, I know exactly right but what was interesting was that there were also articles, for example, about Moderna which invented the COVID vaccine and was seen as the next Theranos. So, there's an issue of a legit article that it was like, oh, insiders and former employees talk about how the culture is very secretive and the experiments and results are not, and you have to do a pivot and this could be the next Theranos. Of course, that company turns out to save the world for those in the world who are okay with vaccines. I mean, destroy the world if you're anti-vax. But the point I'm trying to say here is there's this aspect of the headlines, and I think you had to be aware that if you are a founder, you're a public figure, you are in the public eye. You're not, if you start succeeding, you're not like, I don't know. That's stuff that you can do, and once you're in the public eye, it's not only impropriety, but it's also the perception that's impropriety.


Shiyan Koh: (14:57)

Yeah. Is it okay that Clarence Thomas has a billionaire friend that takes him on fancy vacations, to people who are paying for his adopted son's tuition to the tune of hundreds of thousands of dollars? I don't know, maybe you don't have to report it, but it sure looks weird.


Jeremy Au: (15:18)

Yeah, I think the headlines are not happy or positive about this for sure and I think they bring me to something else that you said, which is like, they're going through these tough situations that are going to happen and what they reminded me about is this, it's kind of unfair as well, because, a lot of these founders are first-time founders. They don't have a lot of professional experience. They may not necessarily have managerial experience but it feels unfair in some ways because we're asking them to grow like crazy and just saying that, and then they grow as a manager simultaneously as well as figuring out the business. So, yeah. It's like, is there a surprise, for example, to some extent, I mean, FTX is a good example. I mean they're all super junior, right? They all have very little work experience. There's some, a little bit in smaller funds and then they grew like crazy.


Shiyan Koh: (16:12)

I feel like borrowing money from your company, that's a good judgment thing. I don't think you need to be super senior to be like, is this a good idea? Like, no, it is not a good idea.


Jeremy Au: (16:26)

Yeah, I think that being said Constance Wong, the Singaporean COO, at least was accredited as a CFA and she did go through credit service risk management. So she did go through all training. So for her, unfortunately, I can't say that she's ignorant. She does know what was good behaviour and she knows what was within bounds and what was probably out of bounds, and as a COO you have the requirements to do that. But I think other startups have gone through that stack and they, didn't have that professional experience and they don't have a head of HR. They don't have a people leader.


Shiyan Koh: (17:07)

I mean, that's fine, but I think people have to take responsibility. You are a human. Okay? So separate from CEO, you're a human. So it's like, as yourself. It's like, would I want to be treated that way? If someone else did this thing, did I think that's okay? You people still have to exercise personal responsibility here. And also you're not helpless. You have investors and I think investors have a role to play here on the governance front, but also you could talk to other founders and be like hey, how do you do this thing? What is best practice? And not just people who are on the same level as you, but people whose businesses are more advanced. So it's not totally the blind leading the blind to just be like, you've already gone through this stage, right? You've built out this team. How did you think about these decisions? I think it's kind of on you to try to make good decisions. I don't think you can just throw up your hands like, oh, I was young. I didn't know.


Jeremy Au: (18:13)

Well, I mean, there's a difference between, you say you don't know, you don't know and you say you don't know. I mean, that's what I say is the difference between negligence and gross negligence.


Shiyan Koh: (18:28)

Sure. But I mean, I think like, you're smart and capable that's why you're a founder. So you could still like find help, ask, get resources, all that sort of stuff.


Jeremy Au: (18:38)

Yeah, but it's half right. You're busy. I mean, I was a founder. I was going bonkers building and I didn't know anything. Yeah, I mean, I benefited from being in Singapore or Boston. I could ask lots of people, but you know, I was just super stressed all the time. I was like barely on top of it.


Shiyan Koh: (18:57)

Well, you know what's more stressful? Jail. Jail is pretty stressful. I'm just serious about this.If you're going to exercise reasonable judgment, you got to like ask for help. No one's saying you need to know everything out of the gate, but I think when something starts to get to the line of like, hey, you don't know whether this is okay or not, that's a clue. But also like ask, right? I mean, I guess it's just like bring us back, which is to think about. I think there's a big difference from when you're four or five people in a room. Everybody knows what is going on and then you start growing, and based on your span of control, there's so much more that it's hard for you to know what everyone is doing, then I think that's when you have to start really being deliberate in thinking about who is making decisions. What do they, and what information do these people have access to in two ways. One which is like, does somebody have access to the information they need to do their job well, but also like, is there stuff that people don't need to know because it's sensitive, proprietary?

We don't need to give every Tom, Dick and Harry intern a new person, access to it or like even this running away with the money. Who has access to the bank accounts? Should everyone have access to the bank accounts? Probably not. Maybe there should be limits. You can't withdraw more than $10,000 without two signatures or whatever it is. I mean, I think basically, there's something like as the business grows, you'll have to think about what that expanding pool of controls is, and you just need to be more deliberate about some of it.


Jeremy Au: (20:41)

I think it feels like there are three periods in the startup. There are things when things are calm enough for that to happen, obviously to be, then there are the companies that are going down, so it's pivot, et cetera. As you said earlier, there is going to be a bad experience and bad decisions in terms of how it's felt and it's going to be perceived, come to light, be explained and I think there's also the other type of errors which is the company's growing like crazy and then people are not on top of it. They're not on top of that growth, and then in those moments are the seeds of the future destruction or errors that come out later, because, I think every startup kind of goes flying straight, going up, going down, and it's a sequence of that.

And so, there's a bunch of, I don't know what you call it, equanimity. There's a lot of good times here to be at peace, bad times here to be at peace, but I think there's this level of people leadership we are talking about, which these fundamental questions. Have you answered at all, of those three stages, which is, I think hard, honestly. I found it hard when I was a founder, to stay on top of everything and it's not as if my VCs are much help. I mean, some of them were, but some, not as much. Also, they can't help. They can give you advice. What you mean by that is, some VCs were more helpful because they were really in the trenches and they could get into granular of the decisions and some VCs were less helpful because they couldn't get granular at all. So it was all like platitudes in that sense. So, I don't know. I think you mentioned a book. Hard Things About Hard Things is a pretty good book. You want to talk about that?


Shiyan Koh: (22:29)

I mean, it's not a new book, but I think it has a very real take on the hard things that happen, and it's like at a very like tactical level like titles you should give people, how do you feel about title inflation, and in the beginning, you're just like, yeah, sure, whatever title you want, right? Because it's like a title is free to give away, but then, that is also a mess that has to be cleaned up later because it's like, well, what does it mean when an organization to have a title if you just kind of gave them away and what is your philosophy as an organization on how you feel about titles and what they represent? So if you haven't read it yet, I would read it. I think it's a good one for the canon and I think on the org design stuff. You know, there's a section that talks about like, hey, first of all, no design is perfect. Every design is trading off something for another thing. Why do startups re-org all the time? Because your business is growing quickly and the thing that you were optimizing for in phase one is not necessarily the thing you're optimizing for in phase two, and so you have to reorg the people to address phase two.

What is also true is human beings hate change. It's very disorienting for them, and so it's like when you re-org people, then everyone's like, what's happening? Like, “oh, first I was on this team, but now I'm on this team”, “oh, I really want to be with this person”, and it creates a lot of anxiety. Then you're just like, oh, well we're saying we're reorganizing because of our priorities or we're shifting. Does that mean I'm not important anymore? And then, that has its cycle of emotional upset that happens and so I think at the end of the day we're in a people business and like having some recognition or empathy that whatever org changes you make are going to drive these feelings is sort of one way to get ahead of it.


Jeremy Au: (24:32)

That reminds me about some of unique Southeast Asia challenges as well. I think one of them is just like, there are a lot more people at every stage, per re-org, per round in Southeast Asia compared to the US and what I mean by that is, what we've seen is that, for example, if you receive a 10 million round in the US versus in Southeast Asia, the number of people that you end up hiring with 10 million is much higher in Southeast Asia because the cost of labor is lower, and so you have this interesting dynamic where Southeast Asian companies are going through those reorgs. You mentioned those changes, but they're two or three times larger.

Instead of a 20 man team, it becomes like a 40-man or 60-man squad going through that reorg which is just in order of magnitude more challenging and then's also different clusters of different countries with different cultures. For example, the engineering team may be in Vietnam. You may have a cluster in the Philippines, and then the third of course is that everybody's not in the same place. So it's just remote or hybrid or whatever you want to call it. So I think there's a unique Southeast Asian, difficulty multiplier sometimes for these reorgs.


Shiyan Koh: (25:44)

Yeah, I think the geo one is real, which is like how do you communicate and do things when people are all over the place? It is interesting, the number of things, like should Southeast Asian companies have this many employees? Just because they're cheaper doesn't mean you should necessarily hire more people and I wonder sometimes if that is a crutch that because people are cheaper, the tendency is to throw bodies at the problem rather than trying to use software to automate something, which would give you more operating leverage later.


Jeremy Au: (26:23)

I think it can be a crunch to find the middle or senior talent that can also really complement you. So, for example, you may decide to say hey, we can't really find a great CFO or controller that we like with startup experience, but we're happy to take a bunch of finance leads to run the process. In the meantime, I think there's a common trade-off I see a lot of startups kind of make because of the cost disparity, but also the fact that they can't find that person easily in specialized domains means that I don't know, they end up choosing one way, which is not wrong if you ask me. If you even put my hand on my heart, I'll be like, is it wrong? I'll be like, no. I think it makes sense. I mean, you got to solve accounting and basic control, so you might as well hire now, but as you said, there are implicit costs that will catch up right in one year, two years, when you are saying, did we architect the finance? Did we put in the right controls? All these other questions.


Shiyan Koh: (27:17)

I would suspect though, in some of those situations of course, you need to get some of the basics which is like, people need to get paid, accounting needs to be done but you might not find the perfect senior candidate. But if you can actually find a good mid-level general athlete that might be better. At least, apply some strong analytical thinking to the problem before things get really out of hand.


Jeremy Au: (27:52)

Yeah, and that's the tricky part. You have the cash burn and you're like, this person is being paid five times the other person. There's worth five people in terms of cost arbitrage. Is this worth it? I think it can be a hard decision to make, not easy. That one thing I've heard, for example, is like in some countries for example, they're more hierarchical. I think we have a previous episode in which Robert Huynh shared about Vietnam. As a Vietnamese-American, he found that in Vietnam, skip levels are pretty uncommon. So there's a practice where the CEO for example, doesn't talk to their subordinate, and that's an uncommon behavior. More common, I would say in Singapore and the US for example, because it's a global practice. But it's a way of course, for the CEO to get a view of the front line, to embed a real understanding of what's going on. Like, hey buddy, let's have a real conversation. I'm not going to tell your boss about what we're talking about, but tell me what you feel about the business.


Shiyan Koh: (28:51)

There are easier ways to, there are other ways to do that.

Jeremy Au: (28:53)

But the concept skip level is to avoid that management filter for good or for bad \that happens in the middle and kind of gets the real front line.


Shiyan Koh: (29:05)

I used to play basketball with our IM team and that was a great way to meet new employees and talk to them.


Jeremy Au: (29:14)

Yeah. I talk about it casually. There's a more informal way of doing it, so that's a good way.


Shiyan Koh: (29:20)

You're just hanging out, you're playing basketball. They make fun of you because you're old and slow.


Jeremy Au: (29:25)

That's part of the fun. It was all of my evil plan to understand. The real reality is to pretend to be old and bad at basketball. I'm good and young at basketball.


Shiyan Koh: (29:37)

No. It was terrible. So it was a co-ed basketball league. It was like a lot of startups had teams and the rule was that you had to have at least two women. And so in the beginning, it was like, we have a really small team. So it was me and this other lady, then even when we were like 400 people, I was still getting roped into play and I was like, there are way more women who work in the company right now. How is it that I'm still like if you don't come, we have to forfeit the game? It was kind of ridiculous.


Jeremy Au: (30:05)

Because you're the best player. That's what they're saying.


Shiyan Koh: (30:06)

No. I think everyone's just like, oh, wow. Whoa. I don't go out after work and play basketball. But I mean, it was fun for me but we had this guy, it was so funny. My colleague, he was like, oh, I played basketball at CALTECH, which if, like CALTECH is not exactly known for their athletic prowess, right? They're known for being super brainy, but he's like, oh yeah, I play basketball at CALTECH and I was like, oh, you should come play with our team and he's like, okay. He gets out. He's on the court for like maybe 45 seconds and blows his ACL. I felt super bad because I was like, oh, you should come play with us. He's like crutching around the office for the next two months. His wife is pissed. I'm just like, oh. Then after that, everyone stretches first. Don't just run onto the court and start running.


Jeremy Au: (31:02)

Yeah, that's a problem for everybody in the middle ages. They play as if they were in university, but their bodies are starting to have that.


Shiyan Koh: (31:09)

I mean, he was a varsity player. He told me he played at CALTECH.


Jeremy Au: (31:14)

I know, but we're getting old. I think one thing is, from my perspective, there is a lack of great people leaders in startups in Southeast Asia. That's my perspective. I think there are great recruiters. I think there are a lot of pretty solid people at the processes, obviously payroll, compliance and so, so forth. I don't feel like there's that community of great startup people, leaders who have gone through 1, 2, 3, because it's not about processes of recruiting. It's more like, you can say processes compliance and culture, let's just say, but it's really about the fact that it's a high growth. It can go up, it can go down, it can go sideways and for performance rather than stability. So I think that's that aspect that I haven't met personally as many great startup veterans, people, and leaders in Southeast Asia.


Shiyan Koh: (32:14)

Yeah, I was in a conversation earlier this week with a bunch of CEOs of mid to late-stage companies in the region. We were chatting with a couple of US CFOs who had taken companies public. So, something that struck me was, they were talking about the difference, first, like how to build up the function on the path to IPO, but also how did their responsibilities shift over that time, right, the difference between a private company and public company CFO and one thing that stuck with me was one chap, very senior, very successful, he said, look, you just have to realize that once you go public, a third of your time will be gone. You'll be on the road talking to investors, being at conferences, preparing all this sort of stuff. So, you're not going to have time for all that internal, so you need to build up your team to get to that level. And he broke down his responsibilities and he's like, I have three jobs.

So one is, what is my role as a member of the senior management team? Okay, as a leader of this company, what is my role as a leader of a function? So finance to the entire org. How does the entire organization view finance and what this team is doing? And then what is my role as a people manager in charge of the literal people? And basically, he's like, I just leaned more into that first role, my role as a leader of this company, which I think, to your point, Jeremy, you don't see as many of those. You see more functional leaders, but not necessarily company-level leaders and being able to be strategic and talk about that, or they don't necessarily even see it as their role.

They see their role as delivering the functional work, and then that first one, that the people management stuff, I think a lot of people don't spend much time thinking about that at all. They think of their people as resources or widgets rather than something that you kind of have a responsibility in developing over time.


Jeremy Au: (34:18)

Yeah, and I think that's true and it's hard to tell who these people are. I mean, it's non-obvious. Frankly, to me, even today, it's like, who are the best people leaders in Southeast Asia? Well, if you do know, feel free to give us a shout-out and let us know because I'm so curious. Who are the best head of people in Southeast Asia? It's hard to tell who are the best startup CFOs who know what to do. Not easy. I think it's not an easy job to do, and it's not easy to identify those who are truly good at it versus also keeping the seat warm.


Shiyan Koh: (34:56)

Oh, that's very harsh.


Jeremy Au: (35:00)

So diplomatic. It's like they were there for the ride.


Shiyan Koh: (35:02)

I don't know. At a high-growth company, I don't know if you're there for the ride. If you're only there for the ride, you're going to fall off the chair. There's just so much stuff that has to get done.


Jeremy Au: (35:13)

That's a good point. There are different stages so that you could be great, and I remember in Boston there was a CFO and the CFO only did seed to series B. So the specialization was I go in, I know that there's no controller, so I walk in my controller, I set the accounts and got to do, make it gap compliant. Sohe's like, he's got the whole playbook. And step number two is, I'm going to work on a board package, make sure it’s super done, all the shots are there, make sure the VCs are happy and then the tree is laid out the fundraising plan and the targets and it was like a playbook, and series B. Peace out. I'm done. I did my four years, hopefully and I'm going to go back to another C company. And it was a fractional approach, but also I think, self-awareness. It was like, oh, I like this madness and I like structuring it.


Shiyan Koh: (36:01)

Being a public company CFO is different.


Jeremy Au: (36:03)

Different type of person, right? Yeah, a hundred percent. So I think that applies to people leadership as well in terms of head of people. People who are good at an early stage, and then some people are much better for the later stage, for example.


Shiyan Koh: (36:15)

I mean, I think what you find is heads of people in the early stage are much more recruiting-oriented because that's what has to get done.You're like, I just need to get bodies in the door, and then I think later when the company has more maturity, then you'll find people more who are like retention, development, and then there's sort of the attendant subspecialties there, leadership and development, compensation, HR, there's a lot of just like legal stuff you have to get through.


Jeremy Au: (36:42)

I would say that I think in terms of that ramp dynamic, I think the biggest error, but I think also, a lot of recruiters kind of find out, but it can be a career-limiting move for a lot of startups. It’s like, you can be focused on recruiting, but you have to do the onboarding. That's such a common error. I see new kinds of people come in as they focus on recruiting everyone there and then they get stuck in the hunt if they make sense and then the onboarding kind of gets left behind because they're like, oh, that's somebody who handles process to do but the problem is that from a candidate perspective, they have a relationship with you as a head of recruiting in that sense and so they, from onboarding, they still want you right from a relationship before they kind of go there and also I think the first three months are the highest likelihood of the person churning out. The person failing to hit the performance requirements. The person is saying hey, I moved to this new role, new company, and my spouse and kids don't like it for some reason and, it doesn't work for me. Head back to their old job or somewhere else. That's such a critical period.


Shiyan Koh: (37:44)

I mean, you have to think about candidate experience all the way through to the first 90 days on the job. So the way that you think about your customer and product experience, that's a candidate experience and what does that funnel and process feel like, and how do you ensure success? Because you spend a lot of money to recruit someone and so if you don't invest in onboarding and they don't kind of hit the ground running, then you've wasted a ton of money in time. So, agree on the importance of onboarding often being kind of overlooked here.


Jeremy Au: (38:18)

Yeah, and everybody's unhappy, so I think a lot of here the people come across correct prett fast once that happens, but I think it's something to know before coming in. And I think it's something for founders to also make sure that their recruiters are already focused on I would say they bring them in let's talk a little bit for our last few moments here like what resources would you recommend to founders to better people leadership, and organizational design.


Shiyan Koh: (38:47)

There's a very small thin book called 'Five Dysfunctions of a Team' that I think is great. You should read it. I recommend it to a lot of people and then they read it and they're like, oh yeah, that's a thing and then they start thinking. I like 'The Hard Thing About Hard Things'. I like 'High Output Management'. That's a good classic. Matt Mochary is like a CEO coach and he has a bunch of free resources online that I think are pretty good.


Jeremy Au: (39:24)

'The Great CEO Within', I think, I used that as well personally when I was a founder.


Shiyan Koh: (39:28)

Yeah. I thought those were pretty good too.


Jeremy Au: (39:31)

Yeah, exactly.


Shiyan Koh: (39:32)

Yeah. So that's probably where I would start. I always just tell people like, you are operating two machines. There's your business machine and your people machine. So the business machine is like, hey, there are marketing dollars in, there are people dollars in, and then there's hopefully revenue and profit out, right? So, you've got your levers and you're moving them. Your people machine operates your business machine, and you need to think about them too and you have to be like, is that the right person pushing that lever? Where is this lever going to be in 12 months? Is that person going to be able to grow into that role? If not today, how am I going to help get them there? Or if I don't think they can get them there, do I need to go hire someone else to layer in? So, I think people think a lot more about the business machine than they think about their people machine. How do you start thinking about them in that proactive way versus our reactive way, one more engineer, one more paid marketing person, right? But thinking about them as a system that you're operating can sometimes be helpful to force the thinking on who else you need to bring on or how you might need to evolve your team.


Jeremy Au: (40:56)

Awesome. I think that's a great note of advice and a good set of resources to follow up on and on that note, see you next week.


Shiyan Koh: (41:04)

See you next week.